❓ WA Treasurer responds to questions regarding the state's declining financial position, attributing it to GST distribution inequities and rejecting claims of mismanagement during the mining boom.
AnsweredQoN 2770Legislative Assembly
QuestionView source ↗
I refer to the Economic Regulation Authority’s (ERA) final report, entitled Inquiry into Microeconomic Reform in Western Australia , specifically to page 42 on the Government’s Financial Position, and ask: (a) what was the major contributor to the decline in the Government’s financial position in recent years; and (b) the ERA has said the State Government may not have, ‘made the best use of the benefits delivered by the mining boom’, how does the Minister explain this mismanagement?
AnswerView source ↗
Answered
16 September 2014
Response time
33 days
(a) The major contributor to the decline in the Government's financial position is the inequitable distribution of GST revenue under the Commonwealth Grants Commission fiscal equalisation model. Notably:
- In 2014-15, Western Australia is forecast to receive a substantially smaller GST grant ($2,262 million) than it received in 2007-08 ($3,984 million);
- If Western Australia had received its population share of the GST pool, it would be $3.7 billion better off in 2014-15 and $23.3 billion better off over the period 2013‑14 to 2017‑18; and
- The decline in Western Australia's share of the GST has been exacerbated by the failure of the GST distribution process to fully account for the costs that the State incurs in supporting major resources projects, and the short-term volatility of iron ore prices and the $US/$A exchange rate.
(b) The Government does not accept this contention.
- In 2014-15, Western Australia is forecast to receive a substantially smaller GST grant ($2,262 million) than it received in 2007-08 ($3,984 million);
- If Western Australia had received its population share of the GST pool, it would be $3.7 billion better off in 2014-15 and $23.3 billion better off over the period 2013‑14 to 2017‑18; and
- The decline in Western Australia's share of the GST has been exacerbated by the failure of the GST distribution process to fully account for the costs that the State incurs in supporting major resources projects, and the short-term volatility of iron ore prices and the $US/$A exchange rate.
(b) The Government does not accept this contention.
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